On April 15, 2025, the Münster Fiscal Court issued an important ruling (case no. 9 K 126/22 K,G) regarding the tax deductibility of expenses for a small aircraft used for business purposes. This ruling provides companies with important clarification on the tax treatment of such business expenses.
Facts of the case
The plaintiff, a GmbH, acquired a used small aircraft for EUR 418,000 net in 2017 in order to make business trips more efficient. The managing director, who did not have a pilot’s license, used the aircraft exclusively for business purposes; all flights were carried out by external pilots. A total of 87 flights were undertaken in the years 2017 to 2019.
As part of a tax audit, some of the aircraft costs were recognized as inappropriate expenses in accordance with § Section 4 (5) sentence 1 no. 7 EStG and excluded from the deduction of business expenses. The plaintiff appealed against this decision.
Decision of the court
The Münster Fiscal Court ruled in favour of the plaintiff and recognized additional operating expenses totalling around EUR 211,000 for the years 2017 to 2019. The court found that the expenses did not qualify as unreasonable within the meaning of Section 4 para. 5 sentence 1 no. 7 EStG. It emphasized that the use of the aircraft was exclusively for business purposes and that the costs were reasonable in relation to the company’s profit.
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Legal classification
The ruling is based on the case law of the Federal Fiscal Court (BFH), in particular the ruling from 19 January 2017 (case no. VI R 37/15), which recognizes the deductibility of aircraft costs under certain conditions. The Münster tax court emphasized that the appropriateness of the expenses in relation to the company’s profit and the exclusive business use are decisive.
Practical tips for companies
Companies considering purchasing an aircraft for business purposes should consider the following points:dejure.org
- Exclusive business use: The aircraft should be used exclusively for business purposes. Private use by the (shareholder) managing director must be taken into account accordingly for tax purposes, reduces the deduction of business expenses and may lead to taxation at the level of the user. A temporary transfer of the aircraft to third parties for a fee could make sense.
- Documentation: Complete documentation of the flights, including the purpose of the trip and participants, is essential.
- Cost-benefit ratio: The expenses should be proportionate to the company’s profit.bundesfinanzhof.de+2dejure.org+2datenbank.nwb.de+2
By observing these points, companies can ensure the tax deductibility of aircraft costs.
Conclusion
The ruling by the Münster tax court provides companies with important clarification on the tax treatment of aircraft costs. It shows that it is possible to deduct business expenses under certain conditions. However, companies should carefully check whether the conditions are met and ensure comprehensive documentation.
Frequently asked questions
1. under what conditions are aircraft costs deductible as business expenses?
The costs must be incurred exclusively for business purposes, must be proportionate to the company’s profit and must not affect private life.
2. how should the use of the aircraft be documented?
Complete documentation of all flights, including purpose of travel, participants and costs, is required.
3. what does “unreasonable expenses” mean for tax purposes?
The appropriateness of expenses for tax purposes within the meaning of Section 4 (5) sentence 1 no. 7 EStG is measured by the question of whether a prudent and conscientious entrepreneur in a comparable situation would also have made such an investment.
The following criteria in particular play a role here:
- Amount of profit before taking expenses into account
- Type and size of the company
- Operational necessity of the aircraft
- Proportionality to alternative travel options (e.g. train, car, scheduled flight)
4. what role does the ratio of expenses to company profit play?
In the case of the Münster tax court (case no. 9 K 126/22 K,G), the aircraft was used for an annual profit of over €1.5 million, with total annual costs of around €70,000. The court
The BFH (ruling from 19.01.2017 – VI R 37/15) also clarifies: The costs must be in reasonable proportion to the business benefit, otherwise they will not be recognized as reasonable.
The author: Sven Sistig
Sven Sistig has been working in national and international tax law for 12 years, with a focus on VAT advice and support for start-ups, (online) retailers and influencers. After holding positions at Deloitte and Flick Gocke Schaumburg, he most recently headed the tax department at ABOUT YOU.
